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Economy & Exchange rates (Supply (Increase demand
Usually causes…
Economy & Exchange rates
Supply
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Market
Place where buyers, sellers trade
Market price - Buyers' charge for items
Depends on supply and demand
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Interest
rates
Interest
Reward for lending; Cost of borrowing
Interest rate
Percent rate loan charge, Savings payment
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Government
influence
Low unemployment
As many able workers in jobs, possible
Low inflation
Slow down price rising - lower prices
Economic growth
Produce more goods, services, higher SOL
Income - from salary; less excess income
VAT - goods, services; Increases prices
Corporation company profits; less invest
less staff - lose profit
National Insurance - state pension, NHS;
company cost increase, inflation
Local Gov - rates from firms; block plan permissions for new premises
Government
Tax
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Legislation
Protects consumers, works
Restricts new premise locations
International
trade
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If the £ rises or appreciates in value against another currency, then you can buy more of the foreign currency for £1, - thus the £ is stronger
If the £ falls or depreciates in value against another currency, then you can buy less of the foreign currency for £1 the £ is weaker
Exchange
rate
Exchange of goods, services between countries.
Foreign rivals - offering better designs, higher quality, low prices
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